Of all the products you have the opportunity to sell, arguably the most neglected is disability income insurance. The need is blatant for a wide range of age spans and income earners, and the product is affordable. Yet, too many good producers overlook the opportunities. What gives?
That’s the age-old question — although it’s not always asked in that way. For years, the industry and our society have suffered, I believe, because the need for income protection in the event of a disability has not been adequately filled.
But don’t blame this month’s panelists for those shortcomings. These three top producers are among the best in the business. Fielding my questions about what drives their passion for the market, the opportunities and challenges they face, and their practical advice for other producers looking to grow their DI business are the following: Robert L. Avery, CFP, CLU, ChFC; Peter R. Magni, LUTCF; and Larry Schneider.
For the rest of this roundtable, see:
Attracting producers to DI
Q: Why do you believe so many producers overlook disability insurance and have yet to integrate it into their own businesses? Is there anything that carriers or marketers might be able to do to help attract more producers to this market?
Avery: It seems everyone wants to be an advisor and go for the “easy” sale. Disability income sales are difficult — due to the time from application to issue — from many aspects, but most things that are tough to achieve typically have the greatest rewards. The reward from a DI sale is not only a monetary reward, but it gives you the sense of satisfaction after you improve a family’s financial situation. My DI sales also have great persistency, which improves my bottom line.
Carriers, marketers or both could share simple yet effective sales ideas to educate producers, so they can help clients realize there is still a place for individual DI beyond what their company benefits provide. Providing statistics, such as the chances of disability versus dying before age 66 or that the major causes of foreclosures are typically due to a disability, would be helpful for the producer.
Magni: One of the biggest reasons so many producers overlook the disability income protection marketplace is that they don’t understand the product enough to explain it to their clients properly. They also don’t understand under what conditions the product will pay a benefit, which is vital information that must be discussed with the client during the sales process.
Companies need to have more educational presentations on the details of the product from a claims point of view, rather than just relating the competitive high-points of their products in relation to another company’s products. Life insurance claims are certainly much easier to understand because a claim is paid one time, when a person dies. Understanding how claims are paid for a disability can be much more extensive and detailed, and claims can be paid more than once from a disability policy.
An own-occupation disability can be very different from a total disability, and a good disability insurance salesperson needs to understand that difference. To attract more producers to this market, carriers and marketers need to help people better understand the product. A beneficial method of understanding this product, especially from a sales point of view, is to speak with insurance personnel who actually underwrite this product and with several claims adjusters to understand the claims process.
Schneider: I have addressed that very question — why I believe agents are reluctant to sell and promote IDI — in one of my articles, and the answer has to do with some of the following reasons: some agents are too busy selling other products; some find it too complicated of a product; some lack underwriting knowledge; and some find there are too many demands for information made by the carrier, such as medical history, tax returns, professional duties, avocations, etc.
A lack of adequate commission is not one of the reasons producers don’t sell this product, especially in view of the fact that, on the aggregate, disability insurance will pay more than any other product, given first-year and renewal commissions. Some agents have the fear of rejection, fear of exclusions and frustration in getting the application approved.
How to enter the DI market
Q: What practical advice would you give the producer who has not yet made DI a part of their product portfolio but is interested in doing so?
Magni: Any producers who would like to get involved in selling disability income protection will be doing themselves and their careers a great favor. Producers who help clients with financial planning in general — with life insurance, retirement planning, college education planning, mutual fund investing, and estate planning, etc. — but never discuss the disability income protection product put their own, and their clients’, futures at risk.
The greatest asset a person has is his or her ability to earn an income, because every financial decision he or she makes is contingent upon the ability to earn an income to continue to pay expenses. If a great financial plan with the above products is put into place without disability income protection, and then a client becomes disabled, the client is going to want to know how much income he or she will receive while disabled. An answer that there will not be any income during this period will not sit very well with a client, and it may be a serious legal problem for the producer.
It is not enough to say you are not going to sell this product simply because you don’t understand it or it is too difficult to sell. If you are a professional helping clients with their financial portfolios, you must begin the discussion about disability income protection planning and offer that product to all clients, to protect them and yourself.
Disability income protection is an eminent product to sell, because it is the single most important product a consumer should buy. It is the one bill that makes sure all of the other bills get paid in the event of a disability. That is a comforting feeling for consumers, even if they foolishly believe they may never become disabled. Get educated by reading as much about the product you can get your hands on, and do the full job for your clients.
Schneider: To be successful in the untapped IDI marketplace, one must become knowledgeable, since knowledge is power. One also must be willing to take a few bumps along the road, since every rejection will bring you closer to a yes. To gain knowledge and experience, one should join an association that promotes IDI, read up on the subject — buying “The Anatomy of Disability Income Protection” can be a good start — and allocate, in the beginning of your new path, just one day a week that will be 100 percent devoted to prospecting, and then increase it to more as success begins to evolve.
What’s wrong with a daytime business, high renewals, and the like? Just one application a week can generate an annual commission of $50,000, and by doing the same in the second year, one will have made $55,000 with renewals, etc. Do the math!
Avery: Personally, I don’t recommend anything to my clients that I don’t first buy for myself. Therefore, if producers want to improve on their DI sales, they need to buy it for themselves first. When speaking to clients and prospects about DI, it lends credibility to the sale when they understand the advisor is recommending something he or she carries and the importance it plays in the overall financial plan.